Correlation Between PACIFIC ONLINE and Methode Electronics
Can any of the company-specific risk be diversified away by investing in both PACIFIC ONLINE and Methode Electronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PACIFIC ONLINE and Methode Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACIFIC ONLINE and Methode Electronics, you can compare the effects of market volatilities on PACIFIC ONLINE and Methode Electronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PACIFIC ONLINE with a short position of Methode Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC ONLINE and Methode Electronics.
Diversification Opportunities for PACIFIC ONLINE and Methode Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PACIFIC and Methode is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and Methode Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methode Electronics and PACIFIC ONLINE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PACIFIC ONLINE are associated (or correlated) with Methode Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methode Electronics has no effect on the direction of PACIFIC ONLINE i.e., PACIFIC ONLINE and Methode Electronics go up and down completely randomly.
Pair Corralation between PACIFIC ONLINE and Methode Electronics
Assuming the 90 days trading horizon PACIFIC ONLINE is expected to generate 0.59 times more return on investment than Methode Electronics. However, PACIFIC ONLINE is 1.71 times less risky than Methode Electronics. It trades about 0.04 of its potential returns per unit of risk. Methode Electronics is currently generating about -0.06 per unit of risk. If you would invest 10.00 in PACIFIC ONLINE on September 3, 2024 and sell it today you would earn a total of 5.00 from holding PACIFIC ONLINE or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PACIFIC ONLINE vs. Methode Electronics
Performance |
| Timeline |
| PACIFIC ONLINE |
| Methode Electronics |
PACIFIC ONLINE and Methode Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACIFIC ONLINE and Methode Electronics
The main advantage of trading using opposite PACIFIC ONLINE and Methode Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE position performs unexpectedly, Methode Electronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Methode Electronics will offset losses from the drop in Methode Electronics' long position.| PACIFIC ONLINE vs. Hyrican Informationssysteme Aktiengesellschaft | PACIFIC ONLINE vs. Universal Insurance Holdings | PACIFIC ONLINE vs. Public Storage | PACIFIC ONLINE vs. Singapore Reinsurance |
| Methode Electronics vs. Hon Hai Precision | Methode Electronics vs. Samsung SDI Co | Methode Electronics vs. Murata Manufacturing Co | Methode Electronics vs. Mitsubishi Electric |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |